NFC Payments are a Dumb, Dumb Idea

Among the many fledgling technologies creating buzz in 2012, I personally think that NFC (Near Field Communication) is the worst. Though all NFC technically means is “transactions made over radio frequency at close range,” the context you’re probably most familiar with is in regards to NFC payments. Put plainly, this is waving-your-phone-in-front-of-a–detector-thingy technology.

It’s similar to how a grocery store clerk slides your gallon of milk over a bar code reader until he hears that familiar “boop” sound at the cash register… except in this case, there’s no barcode—it’s activated by radio waves at close proximity.

In my humble opinion, people are talking about NFC payments because it’s shiny and new. Not because it’s any good. I actually think NFC is a very bad technology. Here are several reasons why:

It doesn’t solve any problems. The problem that NFC payments is purportedly trying to solve is the “pain” of carrying credit and debit cards around in your wallet. But this is hardly a problem. I’ve never heard anyone complain about the hassle of carrying around credit cards. Credit cards and their magnetic strips are an awesome technology. The security is incredibly strong, you can cancel a card instantly if it’s lost or stolen, they’re thin and lightweight, and most importantly, they have no cash value and are easily replaceable. Your phone is not easily replaceable.

People don’t need one more reason to fear losing their smartphones. People are already essentially incapacitated when stuck without their smartphones. Adding one more reason to fear losing your phone is not helpful. And losing the ability to make payments if you don’t have your phone is downright dangerous.

Mass-scale adoption of NFC readers is not going to happen. NFC technology is complicated, it’s expensive, and it’s probably prone to breaking. On the other hand, credit card readers have been around for over 50 years. NFC is a losing proposition for merchants. They’ll quickly see that there’s no incentive to accepting payments this way and they’ll avoid upgrading their machines for as long as they possibly can.

If your phone battery dies, you can’t make any payments. Again, adding a whole new layer of technology to do the same thing that a thin plastic card does is not a smart move and only creates another obstacle for you if your phone is inoperable. Aside from having your phone lost or stolen, which are major hassles, just the minor inconvenience of having your phone battery die (as smartphone batteries are prone to doing) can disable your payment methods. And that’s just as bad as your phone being lost or stolen.

NFC is a toy, not a serious tool. The proof lies in the fact that only Google is pushing NFC, mainly through their Android line of phones. And only a company like Google would, because they have the money to throw at silly pet projects that will never take off. Perhaps there is one company can give NFC the boost in credibility and omnipresence it needs for merchants to begrudgingly accept it. But that company is Apple, not Google. And so far, Apple’s not biting. I think that’s a really smart move. It’s smart for them as a company, it’s smart for them not to support Google’s push, and it’s a smart choice for Apple’s customers—who don’t need it.

It’s not new technology. The Arby’s a few miles from my house has had a sign up on the cash register saying “Blink a Salad” for at least seven years, maybe eight. The “blink” concept was how merchant services companies tried to sell NFC for years—offering a “special” credit card that you could wave over their magical reader without having to swipe your card. I’ve never used this payment method at Arby’s, or anywhere else. And apparently, neither have a heck of a lot of other people.

It’s a security nightmare. When you’re sending payments using wireless signals, there’s a tremendous opportunity for hackers that are snooping around in your proximity to find your payment details in the air. What’s to stop them? And what to notify you that your data’s been stolen? We can’t even secure local wi-fi networks, and that’s been a major problem for years. There’s no way we’ll be able to secure NFC at least until that’s solved.

NFC is an esoteric technology made by tech geeks to impress other tech geeks. That’s it. In my book, that’s a terrible reason for a technology to exist. Technology should be about making tasks easier, faster, and cheaper for the masses. Truly innovative technologies allow us to do things we haven’t been able to do before (as SCUBA allowed us to breathe underwater) or reduce the manpower it takes to accomplish hard work (as the wheel minimized friction and gave us transportation).

Think about all the innovations that fit these criteria: the pulley; the light bulb; the internal combustion engine; the internet; the iPhone, and so on. These are everyday devices that have completely transformed the way people do business and do life. NFC doesn’t do any of these things. It just muddies the water and complicates something that used to be simple. That’s the worst kind of technology.

I think the only real hope that NFC gives us is the chance is that part of the technology will spin off into something different and far more useful (think of all the spun-off technologies that came as a result of NASA research, such as memory foam and flame-retardants).

I predict that NFC payments will die. Hopefully, they’ll die in obscurity like the other technology I really hate: QR codes. But I’ll save that rant for later.

2 Replies to “NFC Payments are a Dumb, Dumb Idea”

Well, I respectfully disagree and most likely I am very biased since I am working on NFC security. Payments is just one potential application of NFC. Access to cars/buildings is another. Or loyalty programs. Another application I like is that NFC can be used to enhance the setup time of bluetooth. So, NFC should not be seen only as a stand-alone application. And besides, only because it is not adopted in the US yet, it does not mean that it will not take off. Many countries in Europe and some in South America already have many pilot projects running. So it will take some time, but I believe NFC really has some value and will make our life easier.

Great response, NFC Guy! Actually, it sounds like you and I agree more than we disagree, for two reasons: 1) I like the basic concept of NFC just fine—as you mentioned, it’s great for building access. Though I suppose I should have been more clear, my point is about NFC *payments.* The security is nowhere near as good as it needs to be, and I think that companies rolling it out now are extremely premature. 2) I am convinced (as my post stated) that NFC’s underlying technology has the promise of being spun off into something else, or as you mention, being paired with another technology where it can enhance the process of something else. I still don’t see myself using NFC payments, ever, unless there’s a dramatic change, but even so, it’s good to see that people are working on it.